Friday, 2 June 2017

What Elite Running Can Teach Business About Measuring Performance

There are many parallels between business and sports. They are both highly competitive, performance based, and operate within variable environments. Both identify objectives for a period of time –ranking, speed, and endurance for elite runners and market position, growth, and profitability for business. Running is often used as a metaphor for business because of its similar operating conditions. They employ strategies to best deploy limited resources to accomplish aggressive goals. They also strive to maximize results by managing inputs of production – people, process, and technology. Adages such as "it's a marathon, not a sprint" and "run your own race" help to broaden perspectives on how to win within ever-changing environments. Nike's recent Breaking2 quest to beat the two-hour marathon threshold is the ultimate metaphor for businesses setting and implementing strategies to maximize outputs. All inputs – talent, course, climate, fuel, and equipment – were optimized to achieve record-breaking performance. The lead runner, Eliud Kipochoge, improved the world record time by two minute and 32 seconds and missed the target goal of two hours by only 25 seconds. He is planning for his second attempt.

A skill business can learn from elite running is how to measure performance against objectives.Businesses track performance against their target objective, noting gaps or overages. Anything below the objective is viewed as failure and above is a success. Elite runners take a different approach: They track against their current average performance. Anything below this level is a failure and above is a success.

Measuring gaps versus objectives can direct analysis toward justifications (conditions weren't right) compared to improvements (this condition was right). Dan Sullivan describes how this focus effects people in his book Learning How to Avoid The Gap: "The result is a continual sense of missing the mark, feeling deficient, accompanied by a sense of frustration." As performance improves, the gap reduces, and yet capability gains may not stick because they are not reinforced. Successive failures can lead to despondency and decreased confidence, reducing the probability of future success.

The opposite effect is true for elite runners. Each performance improvement is acknowledged, capability builds, and confidence increases. As Judd Hoekstra explains in his book Crunch Time: How to Be Your Best When It Matters Most, "As your performance improves, your average shifts, which takes your game to the next level." Achievements lead to stronger capabilities and further progress toward the objective.The benefits of focusing on performance improvement are equally applicable to any type of change made to how people work. New behaviours, processes or systems take time to fully adopt and recognition of advances through the transition motivates future gains. It may even lower resistance to new ways of working.Where to focus is a strategy in itself. Measurement of performance improvement acknowledges that success comes in increments; measurement of performance gaps reinforces the size of the performance improvement that is needed. It's a choice between beating the world record by two minutes and 32 seconds or missing the objective by 25 seconds. Which one would you choose?

Another running adage comes to mind: "Champions do not become champions when they win the event, but in the hours, weeks, months, and years they spend preparing for it." Feeling like a champion along the way usually leads to the best performance.Phil